Sec 80 education loan

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 February 2013 dear all,

can we take education loan principal amount under sec 80C??

please let me know how to treat Education Loan under 80 C.

CA Gopal Somani

CA Gopal Somani (Expert)
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08 February 2013 No deduction is available for repayment of education loan..please read the following provision :-
80E. (1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education or for the purpose of higher education of his relative.

from above main points to avail the deduction are
1.Eduction loan should be taken by Assessee.
2.The amount eligible for deduction is repayment of eduction loan interest.
3.There is no limit for amount of repayment of interest.Unlimited amount of interest can be deducted under this section.
4.This deduction is available in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the interest is paid by the assessee in full, whichever is earlier.
5.Initial Assessment year means previous year in which assessee starts paying the interest amount.
6.The loan should be taken for the purpose of higher eduction,and higher eduction means " any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognised by the Central Government or State Government or local authority or by any other authority authorised by the Central Government or State Government or local authority to do so;
7.The loan should be taken from any financial institution or any approved charitable institution.(in simple main Banks are covered)
8.The loan should be taken for higher study of himself or studies of relative
9.Relative under this section means the in relation to an individual, means the spouse and children of that individual the student for whom the individual is the legal guardian.
10.Earlier to previous year 2006-07 the above deduction is available for loan taken and repaid by the assessee himself for his studies only but after finance act 2007 ,"the deduction is available for the purpose of higher education of his relative also.relative, in relation to an individual, means the spouse and children of that individual or the student for whom the individual is the legal guardian.
11.There is no deduction available for repayment of principal ,this deduction is available to only for interest repayment.
12.This deduction is available for individual only and not for other type of assessee .
13.The loan should be for pursuing higher studies means loans taken not only for tuition or college fees but also loan taken other incidental expenses for pursuing such studies like hostel charges,transport charges etc etc is also covered under this deduction,
14.There is no condition that the course should be in India .
15.80 E (deduction on Interest on study loan) was available to parents and person himself but now after finance act 2009(2) it is available to Legal guardian also.

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